Brazilian buyers are securing more favorable deals in the natural gas spot market, where prices have been below long-term contracts throughout the first half of the year.
Spot prices in the regulated market have ranged from $5.88-9.04/mmBtu, averaging $7.46/mmBtu, while long-term contract prices ranged from $9.24-12.16/mmBtu, averaging $10.70/mmBtu, according togas-onlyArgus data. Prices in the free market have remained within a similar range.
The average spread of over $3/mmBtu underscores a structural shift in the sector and a growing preference for greater flexibility. Still, Brazil's spot market remains nascent and figures from the first half of 2025 reflect emerging trends rather than a fully established pricing curve.
Spot gas deals in Brazil tend to respond more directly to short-term domestic fundamentals such as supply, demand and rainfall, according to market participants. In contrast, long-term prices are more exposed to global volatility, as they are heavily indexed to crude, the US dollar-Brazilian real exchange rate and broader geopolitical dynamics.
At the start of the year, spot prices were nearly 45pc lower than long-term prices. Even in March, when prices briefly converged, the spot market maintained a discount.
Market participants observed a clear pricing divergence in April-May, as domestic supply increased. Some attributed this to the partial activation of the Rota 3 gas pipeline running from the offshore Campos basin to the Boaventura energy complex in Rio de Janeiro, and additional flows from Argentina via Bolivia. Transport company TAG also released volumes into the market using withdrawal services, reportedly at discounted rates.
Meanwhile, long-term contracts remained relatively stable, reflecting the Brent crude and US dollar-Brazilian real indexes. The late 2024 rise in Brent prices — driven by Opec+ production cuts and geopolitical tensions and a weaker Brazilian real elevated long-term gas prices.
This evolving landscape suggests that Brazilian buyers are increasingly exploring the spot market not just for opportunistic purchases, but as a strategic complement to long-term contracts. This gradual shift could influence pricing mechanisms, contract structures and commercial strategies across the sector.
The result is a market in transition. Buyers are no longer relying solely on fixed contracts. Instead, they are actively continuing to leverage the spot market as a competitive and flexible alternative, introducing a new layer of price dynamics to Brazil's gas industry.

